Hot Topics:

Free-cellular program draws lines, scrutiny

By Robert Mills, rmills@lowellsun.com

Updated:
07/06/2013 06:34:26 AM EDT

A crowd lines up to apply for free cellphones and service at a Standup Wireless van in a lot at Salem and Cabot streets in Lowell Tuesday afternoon. The company offers service for those qualified through the federal government's Lifeline program.
SUN / DAVID H. BROW

LOWELL -- About 30 people stood in line in a small gravel lot at Salem and Cabot streets in Lowell on Tuesday afternoon, waiting for the free cellphones being provided by a group of people working out of a van.

The free phones were being offered by Standup Wireless, cellular company that helps people get cellular service through the federal government's Lifeline program. The company has an "A-" rating from the Better Business Bureau, according to the BBB's website.

The free phones aren't for everyone, though.

The Lifeline program is administered by the Federal Communications Commission, and provides telephone service to those who might not otherwise be able to afford it.

To qualify, individuals must be at or below 135 percent of the federal poverty level, or participate in one of several public assistance programs. The exact requirements vary from state to state.

The program is paid for through the Universal Service Fund. All telecommunications companies have to contribute to the fund, and many pass that cost on to their customers via a service charge.

The program became a hot political topic in 2012 when allegations of widespread fraud in the program led to reforms, and some conservatives began referring to the program as "Obamaphones."

The allegations of widespread fraud were confirmed by the FCC, which investigated its own program and found about 270,000 examples of families that were receiving free phone service on more than one phone line.

Advertisement

The law limits each household to a single phone line through the program.

The FCC is now creating databases to ensure families only get one phone line, and taking other measures to reduce fraud and abuse, according to the FCC.

Attacks linking the program to Obama had little basis in fact. The Lifeline program was started by the FCC in 1985, when Ronald Reagan was president.

It was initially aimed at providing landline telephones to those who could not afford them so that everyone could reach emergency services and contact employers and family.

Between 2005 and 2008, while George W. Bush was president, the program was expanded to include wireless service.

That expansion led to a massive increase in the program's cost, which reached about $1.6 billion in 2011, compared to just $772 million in 2008, according to published reports.

The term "Obamaphones" also ignores the fact that the program doesn't actually pay for phones -- it provides for service only.

Lifeline provides about 250 minutes of free cellphone service per month, but there is no government subsidy for an actual phone to use that service.

The phones are provided by Standup Wireless, which buys the phones with its own money, according to Ivy Valentine Pate, the company's senior marketing manager.

Pate said the company also sells additional minutes to those who qualify for phones and are willing to pay for minutes beyond the 250 provided through the program.

"The equipment is owned by Standup Wireless," Pate said. "The service is what's federally funded."

Pate said those receiving the service must recertify that they qualify on an annual basis.

The company is currently providing service in 15 states, and only recently came to Massachusetts, offering phones mostly in urban areas such as Boston and Lowell, Pate said. The company also provides service in rural areas in states like West Virginia.

On Wednesday, the van, awning and security guard that drew the large crowd a day earlier were gone.

Pate said the company sets up at various locations depending on demand.

Anyone interested in finding out whether they qualify can call Standup Wireless at 800-544-4441 and speak to customer-service representatives.

For more information on the Lifeline program and reforms being instituted, visit www.fcc.gov/lifeline.

Welcome to your discussion forum: Sign in with a Disqus account or your social networking account for your comment to be posted immediately, provided it meets the guidelines. (READ HOW.)
Comments made here are the sole responsibility of the person posting them; these comments do not reflect the opinion of The Sun. So keep it civil.